Today we’re looking at the AI value chain, and more specifically, how the migration of AI workloads from centralized data centers to local devices could change the investment thesis for data center real estate.

Right now, most AI feels like a cloud service. You type a prompt into an application, that request travels to a hyperscale data center, a large model performs the computation, and the answer comes back to your phone or computer. That architecture makes sense in the early phase of the market. The models are large. The chips are expensive. The engineering talent is concentrated. The energy requirements are massive.

In many ways, this resembles the mainframe era of computing. In the early days, computation was centralized because local computing was not practical. Then the personal computer changed the value chain. The mainframe did not disappear, but the balance of value shifted.

I believe we’re going to see something similar in AI.

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